In the third quarter, the United States GDP Price Index grew by 1.9%, matching expectations but falling from the previous quarter’s 2.5%. Meanwhile, GDP Sales showed strong growth at 3.3%, exceeding the expected 3.0% and significantly improving from 1.9% in the previous quarter.
The job market saw mixed results. Continuing Jobless Claims declined slightly to 1,874K, better than the expected 1,890K, and lower than the previous figure of 1,879K. However, Initial Jobless Claims increased to 220K, missing expectations of 229K, though it was an improvement compared to the prior 242K.
Jobless claims fell to 220,000 last week, lower than the expected 230,000, showing that the job market is cooling slowly. This comes as the Fed takes a cautious approach to cutting rates, with Chair Powell mentioning fewer risks to jobs. Strong consumer spending and low layoffs are still helping the economy grow, even with ongoing uncertainties.
Corporate profits shrank by 0.4% in the third quarter, missing the forecast of no change (0.0%) and marking a sharp decline from the 3.5% growth seen previously. On the brighter side, GDP growth for the third quarter came in strong at 3.1%, beating the expected 2.8% and slightly up from 3.0% in the last quarter.
Core PCE Prices, an important inflation measure, rose by 2.2% in the third quarter, slightly above the 2.1% expectation but lower than the previous 2.8%. This indicates moderate inflation pressures.
The Philly Fed Business Conditions Index dropped sharply in December to 30.7, down from 56.6 in the previous report. Similarly, the Philly Fed CAPEX Index, which tracks capital expenditures, fell to 18.8 from 24.9. The Philly Fed Employment Index also showed a decrease, dropping to 6.6 from 8.6.
The yield on the 10-year U.S. Treasury note (US10YT=RR) rose to 4.54% following the release of GDP and jobless claims data. Similarly, the 2-year U.S. Treasury yield (US2YT=RR) increased, reaching 4.321%.
These figures highlight a mixed economic performance with stronger growth in some areas, like GDP and sales, but weaknesses in corporate profits and certain employment indicators.
